Private equity investment firm to acquire Applied Systems

Deal valued at approximately $1.8 billion

Applied Systems, Inc. has announced that it has signed a definitive agreement to be acquired by investment funds advised by Hellman & Friedman LLC.

The company is being acquired from the global private investment firm Bain Capital in a transaction valued at approximately $1.8 billion. JMI Equity, a private equity firm that focuses on building market-leading software and technology-enabled services businesses, will be investing alongside H&F and, under the terms of the agreement, members of Applied Systems’ senior management will continue to maintain a significant ownership position in the company.

Read: Applied Systems opens data centre in Canada 

“There are no planned changes in management or company operations. Applied will continue to focus on executing its strategic plan and product vision to continue to enhance the company’s value to its extensive customer base of over 12,000 agencies/brokerages and 350 insurers across the United States, Canada and the United Kingdom,” states an Applied release.

Hellman & Friedman LLC is a private equity investment firm with offices in San Francisco, New York and London and is currently investing its seventh fund, which has over $8.9 billion of committed capital. H&F has extensive experience in the software and insurance industries through current and previous ownership of large-scale agencies, insurance carriers and software providers.

Read: The Compu-Quote Deal: Q&A with Applied Systems CEO Reid French

“All of us at Applied are pleased to be partnering with H&F and JMI Equity as they share our commitment to revolutionize the global business of insurance by investing behind the company’s unique product vision for the benefit of our customers,” said Reid French, CEO of Applied Systems, in a press release. “This is an exciting time in the 30-year history of Applied Systems. Our senior management team and I are extremely appreciative of Bain Capital’s unwavering support in executing our growth mission over these past seven years. This acquisition represents an endorsement of Applied Systems’ talented employee base, strategic plan and product vision that have made the growth of our company possible.”

“We believe Applied Systems is a uniquely positioned company in the global insurance software market,” said David Tunnell, managing director of Hellman & Friedman. “It combines the largest user base in the industry with Applied Epic, the fastest growing new agency management system, to be the market leader in insurance technology for deployments both on premise and in the cloud.”

Anupam Mishra, managing director of Hellman & Friedman, added, “We are enthusiastic to support Reid and the Applied Systems employees as they extend their impressive track record of growth for years to come with mission critical products and services which are at the heart of the insurance agency and carrier businesses.”

See: Photos of Applied Systems’ Epic 7 launch

“We have enjoyed a very productive partnership with Applied Systems, working closely with the management team to expand market share and significantly enhance the product suite,” said Andrew Balson, managing director of Bain Capital. “We wish Reid and the new ownership group great success as they continue to build the business.”

The transaction is subject to customary conditions to closing and is expected to be completed in early 2014.

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